detroit — The city's Office of Inspector General caught Bobby Ferguson trying to do business with the city of Detroit after his release from prison and banned him from doing so until at least 2033.
The bureau's investigation found that Ferguson was convicted 10 years ago of extorting millions of dollars in city contracts during former Mayor Kwame Kilpatrick's administration, and after being released from prison in 2021, he remained in the city. It turned out that he had started a business.
In 2013, Ferguson was convicted of nine felonies, including extortion, racketeering and bribery, related to the Detroit deal. He was ordered to serve eight years of a 21-year federal sentence and pay restitution totaling $6.2 million to the Detroit Water and Sewerage Department. Mr. Ferguson was released on supervised release in April 2021 and shortly thereafter formed the Ferguson Group V, LLC.
The inspector general's investigation began on December 18th. Although the OIG report does not describe what business the Ferguson Group was involved in, it does indicate that the Ferguson Group sought to engage outside contractors.
“The OIG was also informed that Mr. Ferguson approached high-ranking officials in the City of Detroit about the possibility of obtaining a contract with the city,” according to Inspector General Ellen Ha's office.
Mr. Ferguson's disbarment, or ban from city business, was retroactive 20 years from the time of his conviction, beginning on March 11, 2013, and ending on March 11, 2033. This disbarment prevents Mr. Ferguson from acting as a subcontractor or product. Suppliers of services or materials under contract with the City. According to the OIG, Ferguson still owes the Water and Sewer Authority $2.6 million.
At the time of the conviction, the city had no recourse to bar Mr. Ferguson from doing business with the city. In 2018, a city ordinance went into effect that gave OIG the power to bar contractors from current and/or future work. The period of disqualification will depend on the seriousness of the cause, but may not exceed 20 years. There is no statute of limitations on investigations.
A list of all contractors banned by the City of Detroit is posted on the City's website. It was updated Tuesday to include Ferguson.
“Additionally, because Mr. Ferguson is disbarred as an individual, any company he owns, is an officer of, or has a financial or beneficial interest in, directly or indirectly, is a contractor or may not trade as a subcontractor for any period of prohibition,” the OIG report states.
Mr. Ha said his office was created in response to significant corruption in city government, in part due to city contractors like Mr. Ferguson.
“We have a clear and direct mission to hold contractors accountable and stop those who illegally profit from taxpayers' hard-earned money and violate the public trust.” Ha said in a release Tuesday. “With this ban, as with all previous bans, we are fulfilling our mission.”
In November, Mr. Ferguson sued a federal judge, saying the city of Detroit canceled a $1 million cleaning contract with his daughter's company, Staffing Equipment Evolution. The contract was terminated in October after city officials implicated Ferguson. A federal judge rejected Mr. Ferguson's request to be released from court supervision.
OIG said it was unable to reach Mr. Ferguson for an administrative hearing on this matter. The Detroit News was also unable to reach him.
Mr. Kilpatrick was elected in 2001. During his tenure, Mr. Kilpatrick and Mr. Ferguson carried out an “unprecedented extortion scheme targeting local businesses seeking city contracts,” according to the inspector general's report.
In 2002, Mr. Ferguson approached Lakeshore Engineering, a small minority-owned company, after it won a $10 million DWSD sewer contract. Ferguson recognized that the then-mayor still had to sign the contract, but he told Lakeshore city leaders he wanted 25 percent of the contract value. However, he refused because Lakeshore already had a team in place.
In response to Mr. Ferguson's threats, Lakeshore offered him 10%, which Mr. Ferguson rejected. Ferguson then canceled his $10 million contract with Lakeshore. Shortly after, Ferguson had another $5 million Lakeshore contract canceled. Fearing further retaliation, Ferguson was added to the team the next time Lakeshore bid for a city contract, and the company subsequently won the $20 million DWSD contract.
In 2002, Ferguson abused his relationship with the mayor by making a bad deal with the Inland Water Pollution Control Board, which had properly signed a $50 million sewer bond contract.
The same thing happened in 2007 with construction company Walbridge Allinger, the lowest bidder for the $75 million DWSD Baby Creek/Patton Park contract. The partnership generated more than $13 million in revenue for Mr. Ferguson's company, according to the inspector general's report. Mr. Ferguson also attempted to blackmail Mr. Walbridge over the $140 million DWSD Oakwood Pumping Station contract. Walbridge refused and no contract was obtained.
“Mr. Ferguson's actions also affected Detroiters who paid dearly for the city services he manipulated to their advantage,” the report said. “Mr. Ferguson had a habit of awarding contracts to companies that were not the lowest bidders.”
srahal@detroitnews.com
